
car2go's carsharing service left the Twin Cities due to the high taxes charged on vehicle rentals. Photo via Wikimedia/Dirk Ingo Franke
Minnesota’s Senate Tax Committee has passed a bill that would exempt carsharing or hourly rentals from the higher tax rates charged on traditional vehicle rentals, according to a report by Minnesota’s Senate DFL.
Sen. Scott Dibble (D-Minn.) created the bill after car2go stopped its carsharing service last year in Minneapolis and St. Paul due to the high taxes.
In Minnesota, most short-term vehicle rentals are subject to general sales tax, a 9.2% rental tax, and a 5% fee — in addition to any local sales taxes in effect within the area of where the car is rented, according to the report.
The bill would exempt hourly rental vehicles from the 9.2% rental tax and the 5% fee in an effort to support existing carsharing companies and attract new ones, says the report.












